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A mobile virtual network operator (MVNO) is a mobile operator that does not own spectrum or have its own network infrastructure. An MVNO has business arrangements with traditional mobile operators to buy network time, which it then sells to its own customers.
MVNOs work independently of mobile network operators (MNOs) and can set their own pricing structure subject to the rates they’ve agreed to pay MNOs. MVNOs do not own any core mobile network-related infrastructure such as radio access networks or mobile switching centers. MVNOs appear as roaming partners of overseas networks if they own their own home location register. Certain MVNOs also run their own billing and customer care solutions called business support systems.
Techopedia Explains Mobile Virtual Network Operator
MVNOs can be classified into the following categories:
- Business MVNO: Provides custom-made services to businesses
- Discount MVNOs: Provides low call rates to certain market segments
- Lifestyle MVNOs: Focuses on a niche market demography
- Advertising-funded MVNOs: Builds revenues through advertising to provide free voice, text and content to various subscribers
- Ethnic MVNOs: Provides long-distance calling service
There are several reasons why mobile operators permit MVNOs on networks. For example, mobile operators generally find it hard to serve all customer segments; MVNOs can implement specific marketing to tackle targeted consumer groups. Most of the mobile operators have capacity, segment needs and products in new areas such as 3G. MVNOs help ensure better network utilization. MVNOs also help mobile operators target customers with special service requirements. They provide low operational costs for mobile operators, grow average revenue per user and solve difficult issues regarding how to deal with fixed mobile convergence. MVNOs are also more able to try experimental applications and projects.
